News

SAS files for US Chapter 11 bankruptcy protection

SAS has filed for Chapter 11 bankruptcy protection in the US as a strike by its pilots added to its financial concerns.

The move will allow the carrier to continue operating, although the industrial action has grounded about half of its flights.

SAS said the dispute meant the airline had brought forward plans to restructure its finances.

Pilots are striking in a row over plans to cut their salaries as part of the airline’s restructuring plan.

But SAS chairman Carsten Dilling warned: “The on-going strike poses significant challenges to our ability to succeed with our transformation.” 

The airline said: “SAS and certain of its subsidiaries have voluntarily filed for Chapter 11, a legal process for financial restructuring in the US that will enable us to accelerate the implementation of key elements of our transformation plan.

“Our operations will continue as usual during this process and it will have no impact on our customers.

“Importantly, we expect to have sufficient liquidity to support our business and meet our obligations in the near term. 

“In addition to SEK7.8 billion in cash as of June 30, 2022, we are in well advanced discussions to obtain additional financing.”

The airline has identified SK7.5 billion in cost cuts it needs to achieve. 

“Through the process, we intend to reach agreements with key stakeholders, restructure the company’s debt obligations, reconfigure the fleet, and emerge with a significant capital injection that will allow SAS to participate in the market as a strong competitor for the long term.”

The carrier added: “We’re sorry if you’re affected by the pilot strike leading to delays and canceled flights.

“SAS is striving to reach a solution as quickly as possible to prevent additional inconveniences for travellers.”

Chief executive Anko van der Werff said: “Over the last several months, we’ve been working hard to improve our cost structure and improve our financial position. We are making progress, but a lot of work remains and the on-going strike has made an already challenging situation even tougher.

“The Chapter 11 process gives us legal tools to accelerate our transformation, while being able to continue to operate the business as usual.

“We will continue to build back the network connectivity, products and service our customers expect, and we will continue to do so throughout this process and beyond.

“I am convinced that this process will enable us to become an even better airline for our customers and a stronger business partner in the years to come.

“Becoming a more competitive airline will require the full team’s effort and burden-sharing from all stakeholders.

“We urge SAS Scandinavia pilots’ unions to end their strike and engage constructively as part of this process.”

Share article

View Comments

Jacobs Media Group is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

The highest official awards for UK businesses since being established by royal warrant in 1965. Read more.